September 16, 2021

Volume XI, Number 259

Advertisement

September 16, 2021

Subscribe to Latest Legal News and Analysis

September 15, 2021

Subscribe to Latest Legal News and Analysis

September 14, 2021

Subscribe to Latest Legal News and Analysis
Advertisement

FDA Announces First Ever Facility Fees for OTC Drug Manufacturers

On Friday, March 26, 2021, FDA published a Federal Register notice,  “Fee rates under the Over-The-Counter Monograph Drug User Fee Program for Fiscal Year 2021,” announcing 2021 fee rates under its over-the-counter (OTC) monograph drug user program.  This is the first year that FDA has collected user fees from OTC drug manufacturers and submitters of OTC monograph order requests under its new authority under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.  With limited exceptions, all manufacturers of OTC drugs must pay a facility fee, which exceeds $20,000, by May 10, 2021 (45 days after publication of the notice).

Schedule of Fees

Section 744M of the Federal Food, Drug, and Cosmetic Act (FDCA, 21 U.S.C. § 379j-72), as added by the CARES Act, authorizes FDA to assess and collect: (1) facility fees from qualifying owners of OTC monograph drug facilities and (2) fees from submitters of certain OTC monograph order requests (OMOR). The fees will support FDA’s OTC monograph drug activities, including inspection of facilities associated with OTC products and evaluation of industry-initiated OMORs.

OTC Facility

Fee

Manufacturer

$20,322

Contract Manufacturer

$13,548

OTC Monograph Order Request

 

Tier 1

$500,000

Tier 2

$100,000

Who Must Pay the Facility Fee?

Two types of OTC monograph drug facilities must pay the 2021 fee—OTC monograph drug facilities (MDF) and contract manufacturing organization (CMO) facilities (including facilities with operations in 2020).

An MDF is a domestic or foreign business or other entity that is engaged in manufacturing or processing the finished dosage form of an OTC monograph drug.  See section 744L(10) of the FDCA.   A CMO facility is a MDF where neither the owner—nor any affiliate of the owner or facility—sells the OTC monograph drug produced at the facility directly to wholesalers, retailers, or consumers in the United States.  See section 744L(2) of the FDCA.  CMOs include finished dosage form manufacturers that are in a contractual relationship with the sponsor of one or more OTC monograph drugs to manufacture or process such drugs.

Fees are due 45 days from publication of the order (March 26, 2021), which is May 10, 2021.

Who is Exempted From the Facility Fee?

CMOs that only conduct the activities below are not required to pay a facility fee:

  • manufacture or process clinical research supplies;

  • conduct product testing (g., contract laboratories); or

  • conduct “outer packaging” activities for OTC products that are already in final packaged form (g., creating multipacks).

Also, entities that registered with FDA during the COVID-19 pandemic, whose sole activity with respect to OTC monograph drugs during the pandemic consists (or had consisted) of manufacturing OTC hand sanitizer products, are not considered OTC monograph drug facilities and are not subject to facility fees.

Facilities that ceased OTC monograph drug activities, and updated their registration with FDA to that effect, prior to December 31, 2019, also are not required to pay.

What are OTC Monograph Order Request (OMOR) Fees?

In addition to facility fees, the FDA is authorized to assess and collect fees from submitters of OTC monograph order requests (OMOR).  An OMOR is a request for an administrative order from FDA that issues, revises, or amends an OTC monograph.  The OMOR process, implemented under the CARES Act, replaced the long-standing monograph rulemaking process that has been subject to scrutiny for decades.  OMORs can be made by any person marketing, manufacturing, processing, or developing a drug.

Tier 1 OMORs are broadly defined and include any OMORs that do not qualify as Tier 2 OMORs, which include essentially minor changes to existing monographs.  For example, Tier 2 OMORs can include the reordering of existing information in the drug facts label of an OTC monograph drug, the addition of information to the “Other Information” section of the drug facts label (subject to certain limitations), and modification to the “Directions for Use” section of the drug facts label of an OTC monograph drug, consistent with a minor dosage form change.

OMOR fees are due with the OMOR submission.

Where Can I Find More Information? 

More information about facility and OMOR fees, including how to make electronic payment, can be found on FDA’s web site, here: https://www.fda.gov/drugs/over-counter-otc-nonprescription-drugs/over-counter-otc-drug-review-otc-monograph-reform-cares-act#omor, and in the March 26 notice.

Copyright © 2021, Sheppard Mullin Richter & Hampton LLP.National Law Review, Volume XI, Number 88
Advertisement
Advertisement
Advertisement
Advertisement
Advertisement
Advertisement

About this Author

Allison Fulton DC SheppardMullin Shareholder Life Sciences FDA
Shareholder

Allison Fulton is a partner in the Life Sciences and FDA team and is based in the firm's Washington, D.C. office. Allison advises life sciences companies, including pharmaceutical, medical device, dietary supplement, food and cosmetic companies, in matters relating to the development, manufacture, and marketing of products regulated by the U.S. FDA.

Areas of Practice

Allison’s areas of focus include assisting U.S. and international companies comply with current Good Manufacturing Practice (GMP) and the Quality System Regulation (QSR). She regularly advises...

202.747.2195
Theresa E. Thompson, Sheppard Mullin Law Firm, Washington DC, Corporate Law Attorney
Associate

Theresa E. Thompson is an associate in the Corporate and Securities Practice Group in the firm's Washington, D.C. office.

Areas of Practice

Ms. Thompson's practice focuses on such areas as health care fraud and abuse, particularly in matters relating to the civil False Claims Act, physician self-referral (Stark law), and anti-kickback issues, as well as telehealth and telemedicine. She has experience in government investigations, litigation, and regulatory compliance, including in response to government...

202-747-3217
Advertisement
Advertisement
Advertisement